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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
RICHARD M. DAUV AL, Trustee
for the Estate of Joseph Pietro,
Case No.: 8:11-CV-2269-T-27TGW
PREFERRED COLLECTION AND
MANAGEMENT SERVICES, INC.,
BEFORE THE COURT are Plaintiff s Motion for Summary Judgment (Dkt. 26), Defendant's
response in opposition (Dkt. 28), and Plaintiffs reply (Dkt. 32); and Defendant's Motion for
Summary Judgment (Dkt. 24), to which Plaintiff has responded. (Dkt. 27.) Upon consideration,
Plaintiffs Motion for Summary Judgment is DENIED, and Defendant's Motion for Summary
Judgment is GRANTED in part on Counts II, III, and IV, and DENIED in part on Count I.
Joseph Pietro ("Pietro") filed a Chapter 7 Bankruptcy petition on March 15, 2011. The
Plaintiffhere, Richard M. Dauval ("Plaintiff'), was appointed by the Bankruptcy Court as Trustee
to the Bankruptcy Estate. Plaintiffbrought this lawsuit against Preferred Collection and Management
Services, Inc. ("Preferred"), alleging violations of the Fair Debt Collection Practices Act
("FDCPA"), 15 U.S.C. § 1692 et seq., the Credit Repair Organizations Act ("CROA"), 15 U.S.C.
§ 1679 et seq., and the Florida Consumer Collections Practices Act ("FCCPA"), § 559.55 et seq.,
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Florida Statutes. The Complaint also seeks equitable relief for any violations.
On May 18,2010, Pietro received a collection letter from Preferred, which read:
CREDIT BuREAU NOTICE
A review of our collection records indicates that your account has
been reported to credit reporting agencies. Restoring your valuable
credit is certainly important to you.
Act today by contacting our office to resolve this outstanding debt
and restore your credit by having us inform the credit reporting
agencies of your positive action. I trust you will take advantage of
this invitation and immediately contact our office.
(Dkt. 1-2.) The letter also referenced a $350.00 debt owed by Pietro (Id.) This was the only
communication from Preferred to Pietro, and Pietro never responded to the letter. (Dkt. 24 at 3.)
The parties agree that Preferred is a "debt collector" as defined in the FDCP A and the
FCCPA (Dkt. 26 at 3), and that Preferred attempted to collect a consumer debt from Pietro by
using the letter quoted above. (Dkt. 23 at 75:6-9); see 15 U.S.C. § 1692a(6); Fla. Stat. § 559.55.
Preferred has conceded that it has no understanding of Pietro's credit rating (Dkt. 23 at 78:6-9)
and no ability to "quantify" the impact of a payment on Pietro's credit rating. (Id. at 80:5-11.)
Summary judgment is appropriate where "there is no genuine dispute as to any material
fact and the movant is entitled to judgment as a matter oflaw." Fed. R. Civ. P. 56(a). "A genuine
factual dispute exists only if a reasonable fact-finder 'could find by a preponderance of the
evidence that the [non-movant] is entitled to a verdict.'" Kernel Records Oy v. Mosley, 694 F.3d
1294, 1300 (lIth Cir. 2012) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252
(1986». A fact is material if it may affect the outcome of the suit under the governing law. Allen
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v. Tyson Foods, Inc., 121 F.3d 642, 646 (lIth Cir. 1997).
The moving party bears the initial burden of showing the court, by reference to materials
on file, that there are no genuine disputes of material fact that should be decided at trial. Hickson
Corp. v. N Crossarm Co., Inc., 357 F.3d 1256, 1260 (lIth Cir. 2004) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (l986)). If the moving party fails to demonstrate the absence of a
genuine dispute, the motion should be denied. Kernel Records, 694 F.3d at 1300 (citing Adickes
v. S.H Kress & Co., 398 U.S. 144, 160 (l970); Clarkv. Coats & Clark, Inc., 929 F.2d 604, 606-
08 (lIth Cir. 1991)). Once the movant adequately supports its motion, the burden shifts to the
nonmoving party who must go beyond the pleadings to show that specific facts exist that raise a
genuine dispute of material fact for trial. Dietz v. Smithkline Beecham Corp., 598 F.3d 812, 815
(lIth Cir. 2010); Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590,593-94 (lIth Cir. 1995) (citing
Celotex, 477 U.S. at 324).
The evidence presented must be viewed in the light most favorable to the nonmoving
party. Ross v. Jefferson Cnty. Dep't a/Health, 695 F.3d 1183, 1185 (lIth Cir. 2012). Ifthere is a
conflict between the parties' allegations or evidence, the nonmoving party's evidence is
presumed to be true. Shatz v. City 0/ Plantation, Fla., 344 F.3d 1161, 1164 (11th Cir. 2003).
"Although all justifiable inferences are to be drawn in favor of the nonmoving party," Baldwin
Cnty. v. Purcell Corp., 971 F.2d 1558, 1563-64 (lIth Cir. 1992), "inferences based upon
speculation are not reasonable." Marshall v. City a/Cape Coral, 797 F.2d 1555, 1559 (lIth Cir.
1986). If a reasonable fact finder evaluating the evidence could draw more than one inference
from the facts, and if that inference introduces a genuine dispute over a material fact, the court
should not grant summary judgment. Samples ex reI. Samples v. City a/Atlanta, 846 F.2d 1328,
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1330 (11th Cir. 1988).
Count I - Violation of 15 U.S.C. § 1692e(10) - FDCPA
Count I alleges that Preferred violated § 1692e(10) of the FDCP A by using false
representations and deceptive means to collect the debt from Pietro. (Dkt. 1 ~ 20.) Specifically,
Plaintiff alleges that Preferred's collection letter deceived Pietro into falsely believing that his
credit record, history, rating, or report would be restored if he made payment on the debt. (Id ~~
11, 21.) Preferred characterizes Plaintiff s reading of the letter as "bizarre" and "idiosyncratic,"
and interprets the letter as a promise to "inform the credit reporting agencies of [Pietro's]
positive action" in paying the outstanding debt, not as a promise to restore Pietro's credit. (Dkt.
24 at 6.) Plaintiff replies that the "least-sophisticated consumer" could reasonably believe that the
letter promises to restore the debtor's credit upon payment, which Preferred had no intention or
ability to do. (Dkt. 27 at 6; Dkt. 26, at 8, 10.)
The FDCP A prohibits debt collectors from using "any false representation or deceptive
means to collect or attempt to collect any debt or to obtain information concerning a consumer."
Id § 1692e(1O). To prevail on the FDCPA claim, Plaintiff must show that "(1) the plaintiff has
been the object of collection activity arising from consumer debt; (2) the defendant is a debt
collector as defined by the FDCPA; and (3) the defendant has engaged in an act or omission
prohibited by the FDCPA." Fuller v. Becker & Poliakoff, P.A., 192 F. Supp. 2d 1361, 1366
(M.D. Fla. 2002).
There is no dispute that Pietro was the object of collection activity arising from consumer
debt, and that Preferred is a "debt collector" as defined by the FDCP A. The dispositive issue is
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whether Preferred has engaged in some act or omission prohibited by the FDCP A-specifically,
whether Preferred has used "false representation or deceptive means" to attempt to collect the
debt from Pietro.
Plaintiffs § 1692e claim is viewed objectively through the lens of the "least-sophisticated
consumer." LeBlanc v. Unifund CCR Partners, 601 F.3d 1185, 1200-01 (lIth Cir. 2010). The
least-sophisticated consumer is presumed ''to possess a rudimentary amount of information about
the world and a willingness to read a collection notice with some care." Clomon v. Jackson, 988
F.2d 1314, 1319 (2d Cir. 1993). This standard "also prevents liability for bizarre or idiosyncratic
interpretations of collection notices by preserving a quotient of reasonableness." LeBlanc, 601
F.3d at 1194 (quoting U.S. v. Nat 'I Fin. Servs., Inc., 98 F.3d 131, 136 (4th Cir. 1996)).
In LeBlanc, the Eleventh Circuit adopted and applied the least-sophisticated consumer
test to determine whether a debt collector's letter violated § 1692e, or merely conveyed useful
information to the debtor. See id. at 1195. In the summary judgment context, the court imposed
on Plaintiff the burden of proving that "no reasonable jury, viewing the letter through the eyes of
a 'least-sophisticated consumer,' and making all reasonable inferences in [the defendant's] favor,
could find that the letter was merely informative as opposed to threatening." Id. When a
reasonable jury could draw an inference in favor of either party, summary judgment was not
appropriate.Id. at 1197.
Applying this analysis, a reasonable jury could draw an inference in favor of either
Plaintiff or Preferred. Therefore, a genuine dispute of material fact exists as to whether the letter
is "deceptive" under § 1692e(l0). On the one hand, a reasonable jury, applying the least(cid:173)
sophisticated consumer standard, could read the letter as inferring that Preferred would merely
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report the debtor's positive action to the credit reporting agencies upon payment, with no promise
of improving his credit rating. If this inference is drawn, the letter is not deceptive. On the other
hand, a reasonable jury could conclude that a least-sophisticated consumer would infer that
payment would result in a "restor[ation]" of the debtor's credit rating. Drawing this inference, the
letter would be deceptive because Preferred has admitted that it has no control over the value of a
debtor's credit rating. (Dkt. 23 at 18:3-5.) Neither interpretation is bizarre or idiosyncratic.
Here, as in LeBlanc,summary judgment is not appropriate because the parties
"reasonably disagree on the proper inferences that can be drawn from the debt collector's letter."
LeBlanc, 601 F.3d at 1197 (citing Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1176 (11th Cir.
1985)). The cross-motions for summary judgment on Count I are, therefore, denied.
Count II - Violation of 15 U.S.C. § 1679b(a)(3) - CROA
Count II alleges that Preferred violated § 1679b(a)(3) of the Credit Repair Organizations
Act ("CROA"). Both parties have moved for summary judgment. Determining entitlement to
summary judgment involves a two-fold analysis. First, it must be determined whether Preferred
is a "credit repair organization" as defined in § 1679a(3). If Preferred is a "credit repair
organization," it must then be determined whether Preferred violated § 1679b(a)(3).
The Credit Repair Organizations Act (CROA) was promulgated ''to protect the public
from unfair or deceptive advertising and business practices by credit repair organizations." 15
U.S.C. § 1679(b). To accomplish this goal, CROA prohibits, among other things, any "person"
from "mak[ing] or us[ing] any untrue or misleading representation ofthe services of the credit
repair organization." Id. § 1679b(a)(3).
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"Credit repair organization,"1 is defined in § 1679a(3):
The term "credit repair organization"--
(A) means any person who uses any instrumentality of interstate
commerce or the mails to sell, provide, or perform (or represent
that such person can or will sell, provide or perform) any service,
in return for the payment of money or other valuable
consideration, for the express or implied purpose of-
(i) improving any consumer's credit record, credit history, or
credit rating; or
(ii) providing advice or assistance to any consumer with regard
to any activity or service described in clause (i); ....
Id To establish that Preferred operated as a credit repair organization, Plaintiff must show that
Preferred '''(1) used any instrumentality of interstate commerce, or the mails to (2) sell, provide,
or perform (or represent that they could do so) (3) in return for valuable consideration (4)
services or advice about services (5) for the express or implied purpose of improving a
consumer's credit record, credit history, or credit rating.'" RCA Credit Servs., 727 F. Supp. 2d at
1332 (quoting Hillis v. Equifax Consumer Servs., Inc., 237 F.R.D. 491, 511 (N.D. Ga. 2006».
The plain language of the collection letter demonstrates that Preferred used the mail to
represent that it could provide services for the express or implied purpose of improving Pietro's
credit rating. The critical issue, therefore, is whether Preferred met the fourth element of a credit
repair organization by providing-in return for valuable consideration-services for the purpose of
I Although § 1679b(a) prohibits any "person" from making untrue or misleading representations, this Court
and others have previously held that, given Congress' purpose in enacting CROA, "only a credit repair organization
or a person associated with a credit repair organization can violate this provision." Fed Trade Comm 'n v. RCA
Credit Servs., LLC, 727 F. Supp. 2d 1320, 1334 n.21 (M.D. Fla. 2010) (citing various cases for the same
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improving Pietro's credit rating.2
Preferred is not a "credit repair organization," as defined in § 1679a. The evidence
demonstrates that there is no dispute that Preferred sought only to collect the $350.00 outstanding
debt from Pietro, and never offered to perform any services related to Pietro's credit record,
credit history, or credit rating in exchange for compensation other than the debt owed. Indeed, the
Complaint alleges simply that "[a]t all times herein, the Defendant attempted to collect a debt."
(Dkt. 1 ~ 8.)
The language in Preferred's letter is almost identical to the collection letter in Oslan v.
Collection Bureau of Hudson Valley, where the defendant offered to "restore" the debtor's credit
in exchange for payment on a debt. No. Civ.A 01-2173,2001 WL 34355648, at * 1 (E.D. Pa.
Dec. 13,2001). Holding that the defendant was not a "credit repair organization," the Oslan court
concluded that "[ c ]ollection agencies, insofar as they do not seek compensation for credit repair
services, do not engage in the type of conduct which Congress sought to regulate in enacting the
CROA." 2001 WL 34355648, at *1. This Court agrees.
Because it is not a "credit repair organization," Preferred is entitled to summary judgment
on Count II.
Count III - Violation of Fla. Stat. § 559.72(9) - FCCP A
Count III alleges that Preferred violated § 559.72(9), Florida Statutes ("FCCPA"), by
implying that it could and would restore Pietro's credit upon payment of the debt. Because
Plaintiff predicates his entire FCCP A claim on the allegations supporting the failed CROA claim,
2Plaintiffargues that this question is controlled by Bigalke v. Creditrust Corp., 162 F. Supp. 2d 996 (N.D.
Ill. 2001). Bigalke was decided at the motion to dismiss stage, id at 997, rather than at summary judgment, and is
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Preferred is entitled to summary judgment on Count III.
The FCCP A prohibits any person from claiming, attempting, or threatening to enforce a
debt when the person knows that the debt is not legitimate, or asserting the existence of some
other legal right when the person knows that the right does not exist. Fla. Stat. § 559.72(9). When
assessing whether the defendant has asserted the existence of "some other legal right" that does
not exist, one "must refer to other statutes that establish the legitimacy of a debt and define legal
rights." Cliffv. Payco Gen. Am. Credits, Inc., 363 F.3d 11l3, 1126 (l1th Cir. 2004) (citing
Kaplan v. Assetcare, Inc., 88 F. Supp. 2d l355, 1363 (S.D. Fla. 2000)).
Although the Complaint does not specify a legal right, Plaintiffs Motion for Summary
Judgment clarifies that the FCCP A claim rests entirely upon the allegations supporting his
CRDA claim. (Dkt. 26, at 14 ("For that reason, the court should refer to the CROA in
determining whether [Preferred] asserted a legal right that doesn't exist.").) Since Preferred is
entitled to summary judgment on the CROA claim, Plaintiff cannot establish the requisite
statutory violation to sustain his claim under the FCCP A. See Greene v. Douglas, Knight &
Assocs., Inc. (In re Cheaves), 439 B.R. 220,224 (Bankr. M.D. Fla. 2010) (granting summary
judgment to the defendant on an FCCP A claim resting entirely on the allegations supporting an
FDCPA claim, on which defendant was granted summary judgment). It follows that Preferred's
collection letter does not assert "the existence of some other legal right when such person knows
that the right does not exist" in violation of § 559.72(9). Preferred is therefore entitled to
summary judgment on Count III.
Count IV - Declaratory and Injunctive Relief
In Count IV, Plaintiff seeks declaratory relief that Preferred violated the FDCPA, CROA,
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and FCCP A, and injunctive relief prohibiting Preferred from "continuing to falsely represent to
Plaintiff that Defendant can restore Plaintiffs credit." (Dkt. 1 'il34.)
Since Preferred is entitled to summary judgment on the CROA and FCCPA claims,
Preferred is likewise entitled to summary judgment on the declaratory and injunctive relief
sought in relation to those claims. Moreover, equitable relief is not available to an individual
under the FDCP A. Sibley v. Fulton DeKalb Collection Serv., 677 F .2d 830, 834 (11 th Cir. 1982);
see also Bolin v. Sears, Roebuck & Co., 231 F.3d 970,977 n.39 (5th Cir. 2000) ("[C]ourts
uniformly hold that the FDCP A does not authorize equitable relief. "). Preferred is therefore
entitled to summary judgment on Count IV.
For the foregoing reasons, Plaintiffs Motion for Summary Judgment (Dkt. 26) is
DENIED. Preferred's Motion for Summary Judgment (Dkt. 24) is GRANTED in part on Counts
II, III, and IV, and DENIED in part on Count I.
DONE AND ORDERED this Z~ ~ day of November, 2012.
United States District Judge
Copies to: Counsel of Record